AT&T (T) Drops After Data Plan Cost Reduction Announcement

NEW YORK (TheStreet) -- AT&T (T) was down 2.97% to $32.33 Monday morning following the wireless carrier's announcement that it would slash prices on one of its data plans.

The second-biggest wireless carrier in the U.S. announced Saturday that it plans to reduce the cost of its 10 gigabytes per month data share plan, targeting families, to $15 per phone from $40 per phone. According to the company, this means that a family of four would pay $160 per month for the plan, which would be $100 less than Verizon  (VZ), $80 less than Sprint  (S) and $20 less than T-Mobile USA (TMUS).

This move could force the other U.S. wireless characters to make some changes of their own, but Wells Fargo analysts do not see an immediate reaction forthcoming.

"It is too soon to see if others react. With these plans T is still at a premium to S and TMUS, but a clear discount to VZ," the research notes reads. "Big Red (VZ) will be the one to watch, in our view as they have been on record saying it would react to price moves if they felt the need."

TheStreet Ratings team rates AT&T INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate AT&T INC (T) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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